30-Year Treasury Yield Hits 5.44%, Highest Since 2004, Extending Global Bond Selloff

The 30-year U.S. Treasury yield rose as much as 4 basis points to 5.44% on Thursday, the highest since 2004, as a long-dated bond selloff driven by inflation and fiscal concerns reached a new milestone. The 10-year yield extended gains after touching a 19-year high on Wednesday, with maturities across the curve approaching their highest levels since 2007. Yields climbed on stronger-than-expected U.S. economic data, hawkish Federal Reserve commentary, rising oil prices tied to U.S.-Iran tensions, and expanded government borrowing. S&P Global's September services PMI rose to 58.7, a near five-year high, while manufacturing PMI hit 56.7, the strongest in over four years. Traders now price a 70% chance of another FOMC rate hike at the October meeting, according to CME Group's FedWatch tool. Fed Governor Michael Barr said Wednesday that "further policy adjustments" may be needed to bring inflation to target. Deutsche Bank analysts attributed the selloff primarily to strong PMI data and rebounding oil prices. Rising yields have also limited the Treasury's efforts to lower long-term borrowing costs.